In Making an Estimate of the Most Pessimistic Time for an Activity

question 136

Multiple Choice

In making an estimate of the most pessimistic time for an activity, a manager deliberately estimates this time too high (i.e., longer than it should be) . What is the result of this action, assuming the beta distribution is being used to make time estimates?

• A) The most likely time for this activity will be larger than it should be.
• B) The variance of the activity will be smaller than it should be.
• C) The beta distribution will be symmetric around its mean.
• D) The expected time for this activity will be larger than it should be.

Understand the concepts and calculations behind risk-adjusted performance measures.

Differentiate between Sharpe, Treynor, and Jensen's performance measures and understand their applications.

Calculate the dollar-weighted and time-weighted returns on investments.

Understand the concept of the comparison universe in mutual fund evaluation.

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